London, England — MININGREVIEW.COM — 02 November 2009 – Rio Tinto Group “’ the world’s third- largest mining company “’ plans to double its capital expenditure in 2010, having cut its net debt by 42% in the first nine months of this year.
Spending would rise to between US$5 billion (R40 billion) and US$6 billion (R48 billion) “’ more than double its previous guidance of US$2.5 billion (R20 billion), the company said here in a statement ahead of an investor briefing.
The statement added that net debt had dropped to US$22.3 billion (R178 billion) as at 30 September, and the company was on schedule to reduce operating costs by US$2.5 billion (R20 billion) next year.
Bloomberg News reports that Rio cut 16 000 jobs, sold assets and curbed spending after the global recession had curbed demand for metals. The company also grappled with borrowings that had ballooned after its US$38.1 billion (R300 billion) purchase of Canadian aluminum producer Alcan Incorporated in 2007. In June, London-based Rio spurned a US$19.5 billion (R156 million) investment from Aluminum Corporation of China in favour of a US$21 billion (R168 billion) share sale and the formation of an iron ore venture with BHP Billiton Limited.
The company is studying increasing iron ore production in Australia’s Pilbara region to 330 million metric tonnes a year “’ up from its previous guidance of 320 million tonnes, Rio revealed.
Earlier this month Rio “’ the world’s second-largest exporter of iron ore “’ raised its 2009 forecast for output of the steelmaking raw material, saying production would increase by as much as 7.5% as demand recovered.